Supreme Court takes on water rights

The tools the Crown needs to resolve future water rights claims will still be "in the toolbox" if it pushes ahead with state asset sales, the Supreme Court has heard.

In his opening submissions in response to the Maori Council's bid to delay the partial sale of Mighty River Power, the Crown's lawyer, David Goddard QC, said the Crown has acknowledged before the Waitangi Tribunal that Maori had an interest in natural resources.

It was open to the discussion about whether these extended to proprietorial rights short of full ownership, an issue which was not yet resolved, Goddard said.

However the Crown had consulted on the Treaty of Waitangi implications of the mixed ownership model process, considered the matters, and was satisfied that it would not limit its ability to carry out its Treaty obligations.

"The Crown has carefully considered the tools that are in its toolbox for rights, recognition and redress. That toolbox will not be materially impaired by proceeding with the proposed share sales".

The Maori Council's case argues that the sales should be delayed at least until the issue of rights over water are resolved, because the sale may limit its ability to resolve them later.

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Goddard said what was being sold was a stake in an entity which held limited use rights over water and geothermal resources, "creatures of statute" which could be affected by Parliament in the future.

The key tool, he told the court, was ability to reform the Resource Management Act, or the company's resource consents over the assets in question.

Representing the Maori Council, Colin Carruthers QC, told the court that the Crown had considerable control over the SOEs as they currently stood, but it would lose this level of control if shares were sold to third parties.

This would limit the Crown's ability to deal with the natural resources issues.

"Giving Maori direct and meaningful involvement in the power-generating SOEs after privatisation will not be possible," he said.

This was because the Crown would no longer be able to alter the company's constitution or statement or corporate intent.

"The measures cannot constitute major transactions," he said.

"To be approved by the board, the measures would need to be in the best interests of the companies. The measures cannot be oppressive, unfairly discriminatory, or unfairly prejudicial to any minority shareholder."

Carruthers opened his submissions by telling Chief Justice Dame Sian Elias that the Maori Council challenge was not seeking to undermine Parliament, or to argue that Parliament could not make laws contrary to the Treaty of Waitangi, or revisit any decision of the Legislature.

However Parliament had also passed legislation which stated that the programme must be carried out in a manner which was consistent with the Treaty.

Therefore privatisation must be implemented "after provision of a mechanism to ensure that the Crown's ability to take reasonable action to comply with its obligations to uphold the Treaty is not impaired", Carruthers argued.

He said that while the Crown said it acknowledged that Maori had some proprietary rights to water and geothermal resources, the reality was that the policy was to not recognise claims to water ownership on the basis of the incompatibility with New Zealand law.

In December the High Court rejected a bid by the council and other Maori groups. Judge Ronald Young rejected the bid, claiming decisions made by cabinet which would allow the Government to sell up to 49 per cent of a series of State Owned Enterprises was carrying out the will of Parliament, and was therefore could not be reviewed by the courts.

The appeal bypassed the Court of Appeal to New Zealand's highest court, so as to fit within the Crown's timetable for the sales.

The Chief Justice told Carruthers that for the case to succeed the council would have to satisfy the court that the Crown's reduced control of the companies being put up for sale meant other means of address were not sufficient.

She opened the hearing by greeting a packed public gallery in both Maori and English.